Antero Resources Corporation, an independent oil and natural gas company, acquires, explores, and develops natural gas, natural gas liquids, and oil properties in the United States. As of December 31, 2014, the company had 543,000 net acres of oil and gas properties located in the Appalachian Basin in West Virginia, Ohio, and Pennsylvania. It also owns and operates 153 miles of gas gathering pipelines in the Marcellus Shale; and 96 miles of low-pressure, high-pressure, and condensate pipelines in the Utica Shale. The company was formerly known as Antero Resources Appalachian Corporation and changed its name to Antero Resources Corporation in June 2013. Antero Resources Corporation was founded in 2002 and is headquartered in Denver, Colorado.
Take a look at the 1-year chart of Antero (NYSE: AR) below with added notations:
AR has been declining since May, but most recently the stock has been trading in a sideways move. While in that sideways move, the stock has formed a common pattern known as a rectangle. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern.
AR’s rectangle pattern has formed a resistance a $27 (red), and a $20 support (green). At some point the stock will have to break one of the two levels.
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The Tale of the Tape: AR is trading within a rectangle pattern. The possible long positions on the stock would be either on a pullback to $20 or on a breakout above $27. The ideal short opportunity would be on a break below $20.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach